Take the case of ICICI Bank that encountered a particular problem. The bank had financed 200,000 villagers across the country to buy buffaloes. But these customers were unwilling to buy more than two to four buffaloes.

The bank could not convince these customers to increase their stock to a sizeable number, such as 20 buffaloes. The rationale of the villagers was simple. More buffaloes would mean hiring additional help to look after the herd.

On the contrary, four buffaloes can be managed by the family members. Then, the buffaloes could be accommodated in a small courtyard, rather than building a large shed for the herd.

Importantly, as Nachiket Mor, executive director, ICICI Bank points out, “The implication of a financial risk is high when you own a large herd.”

The bank embarked on a pilot project with a company that supplies cattle feed. Around 150 rural households who were the bank’s customers were covered during this trial phase.

Buffaloes owned by these households were put on a diet of cattle feed supplied by the company. The milk yield from these buffaloes increased by 50 per cent.

“We could now give loans for fodder. We had discovered a market for a new product,” says Mor. The company now plans to tap its existing client base (200,000 buffalo owners) for fodder finance.